Wal­len­ford, Mavis Bank com­bine some op­er­a­tions

THE SALES and ad­min­is­tra­tive func­tions of Mavis Bank Cof­fee Fac­tory, which is based in the ru­ral hills of St An­drew, are now car­ried out from the com­plex of sis­ter com­pany Wal­len­ford Cof­fee in Kingston.

The two com­pa­nies have also com­bined their pro­cure­ment teams to han­dle the pur­chase of green beans in the Ja­maica Blue Moun­tains.

The search for syn­er­gies in the cof­fee op­er­a­tions ul­ti­mately con­trolled by Michael Lee-Chin in­cludes the shar­ing of ware­house space and some staff func­tions, and aims to cut op­er­at­ing costs and save on en­ergy amid a gen­eral de­cline in mar­ket de­mand for cof­fee. Mavis Bank now op­er­ates its ac­count­ing, sales and ecom­merce de­part­ments at Wal­len­ford’s head of­fice at Mar­cus Gar­vey Drive in the in­dus­trial belt of Kingston.

The process started just a few weeks ago and con­tin­ues to evolve, Mavis Bank CEO Nor­man Grant told the Fi­nan­cial Gleaner.

H is op­er­a­tion also utilises Wal­len­ford’s ware­house to hold its roasted beans. Grant said that all man­u­fac­tur­ing op­er­a­tions will con­tinue at Mavis Bank in the Ja­maica Blue Moun­tains.

Mavis Bank pro­duces some of the largest quan­ti­ties of Ja­maica Blue Moun­tain cof­fee. Its green beans carry the fac­tory’s name, while its roasted beans are branded as Jablum.

NO PLANS TO MERGE COM­PA­NIES

There are “no plans”, at least not cur­rently, to merge both com­pa­nies or man­u­fac­tur­ing op­er­a­tion, Grant said Mon­day.

The Mavis Bank CEO op­er­ates from the com­pany’s St An­drew base, but he vis­its the Wal­len­ford of­fices on oc­ca­sion.

“Both com­pa­nies are op­er­at­ing as sep­a­rate com­pa­nies. There

are ar­eas of syn­er­gies that will not com­pro­mise the arms length op­er­a­tions,” said Grant. “I can’t speak to the fu­ture but all I am say­ing is we had to make re­dun­dan­cies to make the op­er­a­tions leaner. There are some ar­eas of the op­er­a­tions that are over­seen by a smaller team,” he added, cit­ing pro­cure­ment as one of those ar­eas.

Wal­len­ford’s roast­ing op­er­a­tions were tem­po­rar­ily re­lo­cated to Mavis Bank in Septem­ber 2016, af­ter flood rains drowned its com­plex, but Grant said the ar­range­ment ended around six months ago. He said keep­ing the roast­ing op­er­a­tions sep­a­rate was im­por­tant for dis­tin­guish­ing the Wal­len­ford and Jablum prod­ucts.

Mark McIn­tosh, who heads Wal­len­ford, did not re­spond to re­quests for com­ment.

NO CON­SPIR­ACY

Ear­lier this month, Grant said some po­si­tions were made re­dun­dant at Mavis Bank in an ef­fort to right­size the busi­ness in a pe­riod of re­duced de­mand from Ja­pan, its main cof­fee ex­port mar­ket, and a fall-off in prices from US$60 a kilo to as low as US$30.

Grant also com­mented that no con­spir­acy ex­ists to shut­ter Mavis Bank, which has been a con­cern of some work­ers.

Lee-Chin ac­quired Wal­len­ford in 2013 and Mavis Bank in 2016. To­gether they ac­count for just over half of the Ja­maica Blue Moun­tain cof­fee as­sets.

In late 2016, Spe­cialty Cof­fee In­vest­ments Com­pany Lim­ited, the ve­hi­cle used by Lee-Chin to buy Mavis Bank, sought $1.8 bil­lion from a bond is­sue to re­fi­nance debt and im­prove the cup qual­ity at the fac­tory ac­quired from part­ners PanJam and Ja­maica Pro­duc­ers Group. The bond ma­tures De­cem­ber 2019.